Introduction
In order to prevent banks and other financial institutions from being used as a channel
for Money Laundering (ML) / Terrorist Financing (TF) and to ensure the integrity and
stability of the financial system, efforts are continuously being made both
internationally and nationally, by way of prescribing various rules and regulations.
Internationally, the Financial Action Task Force (FATF), which is an inter-governmental
body established in 1989 by the Ministers of its member jurisdictions, sets standards
and promotes effective implementation of legal, regulatory and operational measures
for combating money laundering, terrorist financing and other related threats to the
integrity of the international financial system. India, as a member of FATF, is committed
to upholding measures to protect the integrity of the international financial system.
In India, the Prevention of Money-Laundering Act, 2002, and the Prevention of Money-
Laundering (Maintenance of Records) Rules, 2005, form the legal framework on Anti-
Money Laundering (AML) and Countering the Financing of Terrorism (CFT). The
provisions of the PML Act, 2002 and the PML Rules, 2005, as amended from time to
time by the Government of India, require Regulated Entities (REs) to follow certain
customer identification procedures while undertaking a transaction either by
establishing an account-based relationship or otherwise, and to monitor their
transactions.
Accordingly, in exercise of the powers conferred by sections 35A of the Banking
Regulation Act, 1949, section 10(2) read with section 18 of Payment and Settlement
Systems Act 2007 (Act 51 of 2007), section 11(1) of the Foreign Exchange Management
Act, 1999, Rule 9(14) of the Prevention of Money-Laundering (Maintenance of
Records) Rules, 2005, and all other laws enabling the Reserve Bank in this regard, the
RBI being satisfied that it is necessary and expedient in the public interest so to do,
hereby issues the Directions hereinafter specified.


Chapter I – Preliminary
A. Short Title and Commencement.
1. These Directions shall be called the Reserve Bank of India (Commercial Banks –
Know Your Customer) Directions, 2025.
2. These directions shall come into effect on the day they are placed on the official
website of the RBI.
B. Applicability
3. These directions shall be applicable to Commercial Banks (hereinafter collectively
referred to as 'banks' and individually as a 'bank').
For the purpose of these Directions, ‘Commercial Banks’ mean banking companies
(other than Small Finance Banks, Payment Banks, and Local Area Banks),
corresponding new banks, and the State Bank of India, as defined respectively under
clauses (c), (da), and (nc) of Section 5 of the Banking Regulation Act, 1949.
4. These directions shall also apply to those branches and majority-owned subsidiaries
of the bank which are located abroad, to the extent they are not contradictory to the
local laws in the host country, provided that:
(1) where applicable laws and regulations prohibit implementation of these guidelines,
the bank shall bring the same to the notice of the RBI. The RBI may advise the bank
to take further necessary action, including application of additional measures to
manage the ML / TF risks.
(2) in case there is a variance in KYC / AML standards prescribed by the RBI and the
host country regulators, branches / subsidiaries of the bank shall adopt the more
stringent regulation of the two.
(3) branches/ subsidiaries of a Foreign Incorporated bank may adopt the more
stringent regulation of the two i.e., standards prescribed by RBI and their home country
regulators.
Provided that this rule shall not apply to ‘small accounts’ referred to in paragraph 28 of
Chapter VI.
C. Definitions
5. In these Directions, unless the context otherwise requires, the following meanings


are assigned to the terms herein:
(1) Terms bearing meaning assigned in terms of the Prevention of Money-Laundering
Act, 2002, and the Prevention of Money-Laundering (Maintenance of Records) Rules,
2005:
(i) ‘Aadhaar number’ shall have the meaning assigned to it in clause (a) of section 2 of
the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and
Services) Act, 2016 (18 of 2016);
(ii) ‘Act’ and ‘Rules’ mean the Prevention of Money-Laundering Act, 2002 and the
Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, respectively
and amendments thereto.
(iii) ‘Authentication’, in the context of Aadhaar authentication, means the process as
defined under sub-section (c) of section 2 of the Aadhaar (Targeted Delivery of
Financial and Other Subsidies, Benefits and Services) Act, 2016.
(iv) Beneficial Owner (BO)
(a) Where the customer is a company, the beneficial owner is the natural person(s),
who, whether acting alone or together, or through one or more juridical persons, has /
have a controlling ownership interest or who exercises control through other means.
Explanation: For the purpose of this sub-clause-
• ‘Controlling ownership interest’ means ownership of / entitlement to more than 10
percent of the shares or capital or profits of the company.
• ‘Control’ shall include the right to appoint the majority of the directors or to control the
management or policy decisions including by virtue of their shareholding or
management rights or shareholders agreements or voting agreements.
(b) Where the customer is a partnership firm, the beneficial owner is the natural
person(s), who, whether acting alone or together, or through one or more juridical
person(s), has / have ownership of / entitlement to more than 10 percent of capital or
profits of the partnership or who exercises control through other means.
Explanation: For the purpose of this sub-clause, ‘control’ shall include the right to
control the management or policy decision.
(c) Where the customer is an unincorporated association or body of individuals,


the beneficial owner is the natural person(s), who, whether acting alone or together, or
through one or more juridical person, has / have ownership of / entitlement to more than
15 percent of the property or capital or profits of the unincorporated association or body
of individuals.
Explanation: Term ‘body of individuals’ includes societies. Where no natural person is
identified under (a), (b) or (c) above, the beneficial owner is the relevant natural person
who holds the position of senior managing official.
(d) Where the customer is a trust, the identification of beneficial owner(s) shall include
identification of the author of the trust, the trustee, the beneficiaries with 10 percent or
more interest in the trust and any other natural person exercising ultimate effective
control over the trust through a chain of control or ownership.
(v)  ‘Certified Copy’ – Obtaining the certified copy by the bank shall mean comparing
the copy of the proof of possession of Aadhaar number where offline verification cannot
be carried out or the officially valid document produced by the customer with the
original, and an authorised officer of the bank shall record the comparison on the copy
as per the provisions contained in the Act. Provided that in case of Non-Resident
Indians (NRIs) and Persons of Indian Origin (PIOs), as defined in Foreign Exchange
Management (Deposit) Regulations, 2016 {FEMA 5(R)}, the bank may alternatively
obtain the  original certified copy, certified by any one of the following:
(a) authorised officials of overseas branches of Scheduled Commercial Banks
registered in India,
(b) branches of overseas banks with whom Indian banks have relationships,
(c) Notary Public abroad,
(d) Court Magistrate,
(e) Judge,
(f) Indian Embassy / Consulate General in the country where the non-resident
customer resides.
(vi) ‘Central KYC Records Registry’ (CKYCR) means an entity defined under Rule 2(1)
of the Rules, to receive, store, safeguard and retrieve the KYC records in digital form
of a customer.


(vii) ‘Designated Director’ means a person whom the bank designates to ensure overall
compliance with the obligations imposed under chapter IV of the PML Act and the
Rules and shall include the Managing Director or a whole-time Director, whom the
Board of Directors has duly authorised.
Explanation: For the purpose of this clause, the terms ‘Managing Director’ and
‘Whole-time Director’ shall have the meaning assigned to them in the Companies Act,
2013.
(viii) ‘Digital KYC’ means that an authorised officer of the bank captures a live photo of
the customer and officially valid document or the proof of possession of Aadhaar
(where offline verification cannot be carried out), along with the latitude and
longitude of the location where such live photo is being taken, as per the provisions
contained in the Act.
(ix) ‘Digital Signature’ shall have the same meaning as assigned to it in clause (p)
of sub-section (1) of section (2) of the Information Technology Act, 2000 (21 of
2000).
(x) ‘Equivalent e-document’ means an electronic equivalent of a document that
the issuing authority of such document issues with its valid digital signature,
including documents issued to the digital locker account of the customer as per rule
9 of the Information Technology (Preservation and Retention of Information by
Intermediaries Providing Digital Locker Facilities) Rules, 2016.
(xi) ‘Group’ – The term ‘group’ shall have the same meaning assigned to it in clause
(e) of sub-section (9) of section 286 of the Income-tax Act,1961 (43 of 1961).
(xii) ‘Know Your Client (KYC) Identifier’ means the unique number or code that the
Central KYC Records Registry assigns to a customer.
Explanation: A customer can obtain his KYC Identifier through the following ways: In the
process of opening an account, once the customer’s KYC Identifier is generated by
CKYCR and provided to the bank, the bank shall share the same with the concerned
customer. The customer can also access his KYC Identifier on CKYCR Portal
(www.ckycindia.in).
(xiii) ‘Non-profit organisations (NPO)’ means any entity or organisation, constituted
for religious or charitable purposes referred to in clause (15) of section 2 of the Income-


tax Act, 1961 (43 of 1961), that is registered as a trust or a society under the Societies
Registration Act, 1860 or any similar State legislation or a company registered
under section 8 of the Companies Act, 2013 (18 of 2013).
(xiv) ‘Officially Valid Document (OVD)’ means the passport, the driving licence,
proof of possession of Aadhaar number, the Voter's Identity Card that the Election
Commission of India issues, the job card that NREGA issues and an officer of the
State Government duly signs, and the letter that the National Population Register
issues containing details of name and address.
Provided that,
(a) where the customer submits his proof of possession of Aadhaar number as an
OVD, he may submit it in such form that the Unique Identification Authority of India
(UIDAI) issues.
(b) when the customer furnishes an OVD that does not have an updated address,
the bank shall deem the following documents or the equivalent e-documents thereof
to be OVDs for the limited purpose of proof of address:-
• utility bill which is not more than two months old of any service provider (electricity,
telephone, post-paid mobile phone, piped gas, water bill);
• property or Municipal tax receipt;
• pension or family pension payment orders (PPOs) issued to retired employees by
Government Departments or Public Sector Undertakings, if they contain the address;
• letter of allotment of accommodation from employer that is issued by State
Government or Central Government Departments, statutory or regulatory bodies,
public sector undertakings, scheduled commercial banks, financial institutions and
listed companies and leave and licence agreements with such employers allotting
official accommodation;
Illustration: If a customer is staying in Chennai but their OVD contains an address of
New Delhi, they can open an account in Chennai by submitting a deemed to be
OVD for the purpose of proof of address. However, as mentioned below in clause (c),
they are required to submit an OVD with current address within a period of three
months.
(c) the customer shall submit OVD with current address within a period of three months


of submitting the documents specified at (b) above
(d) if the OVD that a foreign national presents does not contain the details of address,
the bank shall accept documents that Government departments of foreign jurisdictions
issue, and a letter that the Foreign Embassy or Mission in India issues, as proof of
address.
Explanation: For the purpose of this clause, the bank shall deem a document to be an
OVD even if there is a change in the name subsequent to its issuance provided that it
is supported by a marriage certificate that the State Government issues or a Gazette
notification, indicating such a change of name.
(xv) ‘Offline verification’ shall have the same meaning as assigned to it in clause (pa)
of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies,
Benefits and Services) Act, 2016 (18 of 2016).
(xvi) ‘Person’ has the same meaning assigned in the Act and includes:
(a) an individual,
(b) a Hindu undivided family,
(c) a company,
(d) a firm,
(e) an association of persons or a body of individuals, whether incorporated or not,
(f) every artificial juridical person, not falling within any one of the above persons (a to
e), and
(g) any agency, office or branch owned or controlled by any of the above persons (a to
f).
(xvii) ‘Principal Officer’ means a bank’s nominated officer at the management level,
responsible for furnishing information as per rule 8 of the Rules.
(xviii) ‘Suspicious transaction’ means a ‘transaction’ as defined below, including an
attempted transaction, whether or not made in cash, which, to a person acting in good
faith:
(a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an
offence specified in the Schedule to the Act, regardless of the value involved; or


(b) appears to be made in circumstances of unusual or unjustified complexity; or
(c) appears to have no economic rationale or bona fide purpose; or
(d) gives rise to a reasonable ground of suspicion that it may involve financing of the
activities relating to terrorism.
Explanation: Transaction involving financing of the activities relating to terrorism
includes transaction involving funds that the bank suspects are linked or related to, or
to be used for terrorism, terrorist acts or by a terrorist, terrorist organisation or those
who finance or are attempting to finance terrorism.
(xix) A ‘Small Account' means a savings account which is opened in terms of sub-
rule (5) of rule 9 of the PML Rules, 2005. Details of the operation of a small account
and controls to be exercised for such account are specified in paragraph 28.
(xx) ‘Transaction’ means a purchase, sale, loan, pledge, gift, transfer, delivery or
the arrangement thereof and includes:
(a) opening of an account;
(b) deposit, withdrawal, exchange or transfer of funds in whatever currency, whether in
cash or by cheque, payment order or other instruments or by electronic or other non-
physical means;
(c) the use of a safety deposit box or any other form of safe deposit;
(d) entering into any fiduciary relationship;
(e) any payment made or received, in whole or in part, for any contractual or other legal
obligation; or
(f) establishing or creating a legal person or legal arrangement.
(2) Unless the context otherwise requires, terms in these Directions shall bear the
meanings assigned to them below:
(i) ‘Common Reporting Standards (CRS)’ means reporting standards set for
implementation of multilateral agreement signed to automatically exchange information
based on Article 6 of the Convention on Mutual Administrative Assistance in Tax
Matters.
(ii) Correspondent Banking: Correspondent banking is the provision of banking


services by one bank (the ‘correspondent bank’) to another bank (the ‘respondent
bank’). A correspondent bank may provide the respondent banks with a wide range of
services, including cash management (e.g., interest-bearing accounts in a variety of
currencies), international wire transfers, cheque clearing, payable- through accounts
and foreign exchange services.
(iii) ‘Customer’ means a person who is engaged in a financial transaction or activity
with the bank and includes a person on whose behalf the person who is engaged in
the transaction or activity, is acting.
(iv) ‘Walk-in Customer’ means a person who does not have an account-based
relationship with the bank, but undertakes transactions with the bank.
(v) ‘Customer Due Diligence (CDD)’ means identifying and verifying the customer
and the beneficial owner using reliable and independent sources of identification.
Explanation: The CDD, at the time of commencement of an account-based
relationship or while carrying out occasional transaction of an amount equal to or
exceeding ₹50,000, whether conducted as a single transaction or several
transactions that appear to be connected, or any international money transfer
operations, shall include:
(a) Identification of the customer, verification of their identity using reliable and
independent sources of identification, obtaining information on the purpose and
intended nature of the business relationship, where applicable
(b) Taking reasonable steps to understand the nature of the customer's business, and its
ownership and control;
(c) Determining whether a customer is acting on behalf of a beneficial owner, and
identifying the beneficial owner and taking all steps to verify the identity of the beneficial
owner, using reliable and independent sources of identification.
(vi) ‘Customer identification’ means undertaking the process of CDD.
(vii) ‘FATCA’ means Foreign Account Tax Compliance Act of the United States of
America (USA) which, inter alia, requires foreign financial institutions to report about
financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers
hold a substantial ownership interest.
(viii) ‘IGA’ means Inter Governmental Agreement between the Governments of India


and the USA to improve international tax compliance and to implement FATCA of the
USA.
(ix) ‘KYC Templates’ means templates prepared to facilitate collating and reporting
KYC data to the CKYCR, for individuals and legal entities.
(x) ‘Non-face-to-face customers’ means customers who open accounts without
visiting the branch / offices of the bank or meeting the officials of the bank.
(xi) ‘On-going Due Diligence’ means regular monitoring of transactions in accounts
to ensure that transactions are consistent with the bank’s knowledge about the
customers, customers’ business and risk profile, the source of funds / wealth.
(xii) Payable-through accounts: The term payable-through accounts refers to
correspondent accounts that third parties use directly to transact business on their own
behalf.
(xiii) ‘Periodic Updation’ means the steps taken to ensure that documents, data or
information collected under the CDD process are kept up-to-date and relevant by
undertaking reviews of existing records at the periodicity prescribed by the RBI.
(xiv) 'Regulated Entities (REs)’ means:
(a) all Scheduled Commercial Banks (SCBs) / Regional Rural Banks (RRBs) / Local
Area Banks (LABs) / All Primary (Urban) Co-operative Banks (UCBs) / State and
Central Co-operative Banks (StCBs / CCBs), and any other entity which has been
licensed under section 22 of Banking Regulation Act, 1949, which as a group shall be
referred as ‘banks’
(b) All India Financial Institutions (AIFIs)
(c) All Non-Banking Finance Companies (NBFCs), Miscellaneous Non-Banking
Companies (MNBCs) and Residuary Non-Banking Companies (RNBCs)
(d) Asset Reconstruction Companies (ARCs)
(e) All Payment System Providers (PSPs) / System Participants (SPs) and Prepaid
Payment Instrument Issuers (PPI Issuers)
(f) All authorised persons (APs), including those who are agents of Money Transfer
Service Scheme (MTSS), regulated by the Regulator.
(xv) ‘Shell Bank’ means a bank that has no physical presence in the country in which


it is incorporated and licensed, and which is unaffiliated with a regulated financial group
that is subject to effective consolidated supervision. Physical presence means
meaningful mind and management located within a country. The existence simply of a
local agent or low-level staff does not constitute physical presence.
(xvi) ‘Video based Customer Identification Process (V-CIP)’: an alternative method
by which an authorised official of the bank conducts customer identification with facial
recognition and customer due diligence. This process involves a seamless, secure,
live, informed- consent based audio-visual interaction with the customer to obtain
identification information required for CDD purpose, and to ascertain the veracity of the
information which the customer furnished, through independent verification and by
maintaining an audit trail of the process. The bank shall treat such processes
complying with prescribed standards and procedures on par with face-to-face CIP for
the purpose of this Direction.
(xvii) ‘Wire transfer’ related definitions:
(a) Batch transfer: A batch transfer is a transfer comprised of a number of individual
wire transfers that are being sent to the same financial institutions but may / may not
be ultimately intended for different persons.
(b) Beneficiary: Beneficiary refers to a natural or legal person or legal arrangement
whom / which the originator identifies as the receiver of the requested wire transfer.
(c) Beneficiary RE: It refers to a financial institution that RBI regulates, which receives
the wire transfer from the ordering financial institution directly or through an
intermediary RE and makes the funds available to the beneficiary.
(d) Cover Payment: Cover Payment refers to a wire transfer that combines a payment
message which the ordering financial institution sends directly to the beneficiary
financial institution with the routing of the funding instruction (the cover) from the
ordering financial institution to the beneficiary financial institution through one or more
intermediary financial institutions.
(e) Cross-border wire transfer: Cross-border wire transfer refers to any wire transfer
where the ordering financial institution and beneficiary financial institution are located
in different countries. This term also refers to any chain of wire transfer in which at least
one of the financial institutions involved is located in a different country.


(f) Domestic wire transfer: Domestic wire transfer refers to any wire transfer where the
ordering financial institution and beneficiary financial institution are located in India.
This term, therefore, refers to any chain of wire transfers that takes place entirely within
the borders of India, even though the system used to transfer the payment message
may be located in another country.
(g) Financial Institution: In the context of wire-transfer instructions, the term ‘Financial
Institution’ shall have the same meaning as has been ascribed to it in the FATF
Recommendations, as revised from time to time.
(h) Intermediary RE: Intermediary RE refers to an RBI regulated financial institution /
entity that handles an intermediary element of the wire transfer, in a serial or cover
payment chain and that receives and transmits a wire transfer on behalf of the ordering
financial institution and the beneficiary financial institution, or another intermediary
financial institution.
(i) Ordering RE: Ordering RE refers to the RBI-regulated financial institution  which
initiates the wire transfer and transfers the funds upon receiving the request for a wire
transfer on behalf of the originator.
(j) Originator: Originator refers to the account holder who allows the wire transfer from
that account, or where there is no account, the natural or legal person that places the
order with the ordering financial institution to perform the wire transfer.
(k) Serial Payment: Serial Payment refers to a direct sequential chain of payment
where the wire transfer and accompanying payment message travel together from the
ordering financial institution to the beneficiary financial institution directly or through
one or more intermediary financial institutions (e.g., correspondent banks).
(l) Straight-through Processing: Straight-through processing refers to payment
transactions that are conducted electronically without the need for manual intervention.
(m)  Unique transaction reference number: Unique transaction reference number
refers to a combination of letters, numbers or symbols, a payment service provider
determines, in accordance with the protocols of the payment and settlement system or
messaging system used for the wire transfer.
(n) Wire transfer: Wire transfer refers to any transaction carried out on behalf of an
originator through a financial institution by electronic means with a view to making an


amount of funds available to a beneficiary at a beneficiary financial institution,
irrespective of whether the originator and the beneficiary are the same person.
(3) Unless defined herein, all other expressions shall have the same meaning as has
been assigned to them under the Banking Regulation Act, 1949, the Reserve Bank of
India Act, 1935, the Prevention of Money Laundering Act, 2002, the Prevention of
Money Laundering (Maintenance of Records) Rules, 2005, the Aadhaar (Targeted
Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 and
regulations made thereunder, any statutory modification or re-enactment thereto or as
used in commercial parlance, as the case may be.


Chapter II – General
A. Board of Directors / Policies related guidelines:
6. Know Your Customer (KYC) Policy:
(1) The bank shall have a KYC policy. The Board of Directors of the bank, or any
committee to which the Board has delegated power, shall duly approve the KYC policy.
(2) The KYC policy shall include following four key elements:
(i) Customer Acceptance Policy;
(ii) Risk Management
(iii) Customer Identification Procedures (CIP); and
(iv) Monitoring of Transactions
(3) The KYC policy shall, inter alia include:
(i) Periodic updation of KYC
(ii) Any exceptional measures for KYC updation, such as requiring a recent
photograph, physical presence, or a more frequent updation schedule than the
minimum prescribed.
(iii) Obtaining a copy of OVD or deemed OVD, for the purpose of proof of change
of address during KYC updation.
(iv) Providing facility of updation / periodic updation of KYC at any branch.
(4) Furthermore, the bank shall have the following:
(i) Policies approved by the Board detailing a robust due diligence process for
managing requests to change the registered Mobile Number for Accounts
opened in non-face-to-face mode.
(ii) Policy approved by the Board or a committee headed by the Chairman / CEO /
MD, to establish parameters for approving cross-border correspondent banking
relationships. New correspondent banking relationships require post facto
approval from the Board or the empowered committee.
7. The specific responsibilities and actions stipulated for the Board or its relevant
committees in paragraph 6 above are elaborated upon in greater detail within the


Directions.
8. In terms of PML Rules, groups shall implement group-wide policies for the purpose
of discharging obligations under the provisions of Chapter IV of the PML Act, 2002. (15
of 2003). Accordingly, every bank which is part of a group, shall implement group-wide
programmes against money laundering and terror financing, including group-wide
policies for sharing information required for the purposes of client due diligence, money
laundering, and terrorist finance risk management, and such programmes shall include
adequate safeguards on the confidentiality and use of information exchanged,
including safeguards to prevent tipping-off.
9. Bank’s policy framework shall seek to ensure compliance with PML Act / Rules,
including regulatory instructions in this regard and shall provide a bulwark against
threats arising from money laundering, terrorist financing, proliferation financing and
other related risks. While ensuring compliance with the legal / regulatory requirements
as above, the bank may also consider adoption of best international practices taking
into account the FATF standards and FATF guidance notes, for managing risks better.
10. Money Laundering and Terrorist Financing Risk Assessment by the bank:
(1) The bank shall carry out ‘Money Laundering (ML) and Terrorist Financing (TF) Risk
Assessment’ exercises periodically to identify, assess and take effective measures to
mitigate its money laundering and terrorist financing risk for clients, countries or
geographic areas, products, services, transactions or delivery channels, etc. The
assessment process shall consider all the relevant risk factors before determining the
level of overall risk and the appropriate level and type of mitigation to be applied. While
preparing the internal risk assessment, the bank shall take cognizance of the overall
sector-specific vulnerabilities, if any, that the regulator / supervisor may share with the
bank from time to time.
(2) The bank shall properly document its risk assessment and it shall be proportionate
to the nature, size, geographical presence, complexity of activities / structure, etc. of
the bank. Further, the Board or a committee of the Board to which it has delegated
power shall determine the periodicity of the risk assessment exercise, in alignment with
the outcome of the risk assessment exercise. However, the bank shall review it at least
annually.
(3) The bank shall present the outcome of the exercise to the Board or any committee


of the Board to which power has been delegated in this regard. The outcome shall also
be made available to competent authorities and self-regulating bodies.
11. The bank shall apply a Risk Based Approach (RBA) for mitigation and management
of the risks (identified on its own or through national risk assessment) and shall have
Board-approved policies, controls and procedures in this regard. The bank shall
implement a CDD programme, having regard to the ML / TF risks identified and the size
of business. Further, the bank shall monitor the implementation of the controls and
enhance them if necessary.
12. Compliance of KYC policy: The bank shall ensure compliance with KYC Policy
through:
(1) specifying as to who constitute ‘Senior Management’ for the purpose of KYC
compliance.
(2) allocation of responsibility for effective implementation of policies and procedures.
(3) independent evaluation of the compliance functions of the bank’s policies and
procedures, including legal and regulatory requirements.
(4) concurrent / internal audit system to verify compliance with KYC / AML policies and
procedures.
(5) submission of quarterly audit notes and compliance to the Audit Committee.
13. The bank shall ensure that it does not outsource the decision-making functions of
determining compliance with KYC norms.
B. Other General Guidelines:
14. Designated Director:
(1) A ‘Designated Director’ is a Board-nominated person whom the bank designates to
ensure overall compliance with the obligations imposed under Chapter IV of the PML
Act and the Rules.
(2) The bank shall communicate the name, designation, address and the contact
details of the Designated Director to the FIU-IND and RBI.
(3) The bank shall not nominate the Principal Officer as the 'Designated Director'.
15. Principal Officer:


(1) The Principal Officer shall be responsible for ensuring compliance, monitoring
transactions, and sharing and reporting information as required under the law /
regulations.
(2) The bank shall communicate the name, designation,  address and contact details
of the Principal Officer to the FIU-IND and RBI.


Chapter III – Customer Acceptance Policy
16. The bank shall frame a Customer Acceptance Policy.
17. Without prejudice to the generality of the aspect that Customer Acceptance Policy
may   contain, the bank shall:
(1) not open any account in an anonymous or fictitious / benami name.
(2) open no account where it is unable to apply appropriate CDD measures, either due
to non-cooperation of the customer or unreliability of the documents / information
furnished by the customer. The bank shall consider filing an STR, if necessary, when
it is unable to comply with the relevant CDD measures in relation to the customer.
(3) not undertake a transaction or commence an account-based relationship without
following the CDD procedure.
(4) specify the mandatory information to be sought for KYC purposes while opening an
account and during the periodic updation.
(5) obtain additional information, where its internal KYC Policy has not specified such
information requirement, with the explicit consent of the customer.
(6) apply the CDD procedure at the UCIC level. Thus, if an existing KYC-compliant
customer of a bank desires to open another account or avail of any other product or
service from the same bank, there shall be no need for a fresh CDD exercise as far as
identification of the customer is concerned.
(7) follow the CDD Procedure for all the joint account holders, while opening a joint
account.
(8) clearly spell out the circumstances in which a customer is permitted to act on behalf
of another person / entity.
(9) put in place a suitable system to ensure that the identity of the customer does not
match with any person or entity, whose name appears in the sanctions lists indicated
in Chapter IX of these Directions.
(10) verify the Permanent Account Number (PAN) (if obtained) from the verification
facility of the issuing authority.
(11) verify the customer’s digital signature on the equivalent e-document (if obtained)


as per the provisions of the Information Technology Act, 2000 (21 of 2000).
(12) verify the Goods and Services Tax (GST) number from the search / verification
facility of the issuing authority, where the GST details are available.
18. The Customer Acceptance Policy shall not result in denial of a banking / financial
facility to members of the general public, especially those who are financially or socially
disadvantaged, including the Persons with Disabilities (PwDs). The bank shall not reject
an application for onboarding or periodic updation of KYC without application of mind.
The officer concerned shall duly record the reason(s) for rejection.
19. Where the bank forms a suspicion of money laundering or terrorist financing, and
it reasonably believes that performing the CDD process will tip-off the customer, it shall
not pursue the CDD process, and instead file an STR with FIU-IND.


Chapter IV – Risk Management
20. For risk management, the bank shall have a risk-based approach which includes
the following:
(1) The bank shall categorise customers into low, medium, and high-risk categories,
based on its assessment and risk perception.
(2) The bank may lay down broad principles for the risk-categorisation of customers.
(3) The bank shall undertake risk categorisation based on parameters such as the
customer’s identity, social / financial status, nature of business activity, and information
about the customer’s business and its location, geographical risk covering customers
as well as transactions, type of products / services offered, delivery channel used for
delivery of products / services, types of transactions undertaken such as cash, cheque
/ monetary instruments, wire transfers, forex transactions, etc. The bank may also
factor in the ability to confirm identity documents through online or other services
offered by issuing authorities, while considering customer’s identity.
(4) The bank shall keep the risk categorisation of a customer and the specific reasons
for such categorisation confidential and shall not reveal this information to the customer
to avoid tipping off.
Provided that the bank collects various other non-intrusive information from different
categories of customers relating to the perceived risk, and specifies the same in the
KYC policy.
Explanation: The bank may also use the FATF Public Statement, the reports and
guidance notes on KYC / AML issued by the Indian Banks Association (IBA), and other
agencies, etc., in its risk assessment.


Chapter V – Customer Identification Procedure (CIP)
21. The bank shall undertake identification of customers in the following cases:
(1) Commencement of an account-based relationship with the customer.
(2) Carrying out any international money transfer operations for a person who is not an
account holder of the bank.
(3) When there is a doubt about the authenticity or adequacy of the customer
identification data it has obtained.
(4) Selling third-party products as agents, selling its own products, payment of dues of
credit cards / sale and reloading of prepaid / travel cards and any other product for more
than ₹50,000.
(5) Carrying out transactions for a non-account-based customer, i.e., a walk-in
customer, where the amount involved is equal to or exceeds ₹50,000, whether
conducted as a single transaction or several transactions that appear to be connected.
(6) When the bank has reason to believe that a customer (account-based or walk-in) is
intentionally structuring a transaction into a series of transactions below the threshold
of ₹50,000.
(7) The bank shall ensure it does not seek introductions while opening accounts.
22. For the purpose of verifying the identity of customers at the time of commencement
of an account-based relationship or while carrying out an occasional transaction of an
amount equal to or exceeding ₹50,000, whether conducted as a single transaction or
several transactions that appear to be connected, or any international money transfer
operations, the bank, shall at its option, rely on customer due diligence done by a third
party, subject to the following conditions:
(1) The bank obtains the records or information of the customer due diligence carried
out by the third party immediately from the third party or from the Central KYC Records
Registry.
(2) The bank shall take adequate steps to satisfy itself that the third party will make
copies of identification data and other relevant documentation relating to the customer
due diligence requirements available, upon request, without delay.
(3) A regulator regulates, supervises, or monitors the third party, and the third party


has measures in place for compliance with customer due diligence and record-keeping
requirements in line with the requirements and obligations under the PML Act.
(4) The bank shall ensure that the third party is not based in a country or jurisdiction
assessed as high-risk.
(5) The bank will have the ultimate responsibility for customer due diligence and
undertaking enhanced due diligence measures, as applicable.


Chapter VI – Customer Due Diligence (CDD) Procedure
A. CDD Procedure in case of Individuals
23. For undertaking CDD, the bank shall obtain the following from an individual while
establishing an account-based relationship or while dealing with the individual who is
a beneficial owner, authorised signatory or the power of attorney holder related to any
legal entity:
(1) the Aadhaar number where,
(i) they are desirous of receiving any benefit or subsidy under any scheme notified
under section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies,
Benefits and Services) Act, 2016 (18 of 2016); or
(ii) they decide to submit their Aadhaar number voluntarily to a bank or any RE notified
under the first proviso to sub-section (1) of section 11A of the PML Act; or
(2) the proof of possession of Aadhaar number where the bank can carry out offline
verification; or
(3) the proof of possession of Aadhaar number where the bank cannot carry out the
offline verification or any OVD or the equivalent e-document thereof containing the
details of their identity and address; or
(4) the KYC Identifier with an explicit consent to download records from CKYCR; and
(5) PAN or the equivalent e-document thereof or Form No. 60 as defined in Income-
tax Rules, 1962; and
(6) the bank may require such other documents including in respect of the nature of
business and financial status of the customer, or the equivalent e-documents thereof.
Provided that where the customer has submitted,
(i) Aadhaar number under clause (1) above to a bank or REs notified under first proviso
to sub-section (1) of section 11A of the PML Act, such bank shall carry out
authentication of the customer’s Aadhaar number using UIDAI’s e-KYC authentication
facility. Further, in such a case, if the customer wants to provide a current address,
different from the address as per the identity information available in the Central
Identities Data Repository, they may give a self-declaration to that effect to the bank.


(ii) proof of possession of Aadhaar under clause (2) above where offline verification
can be carried out, the bank shall carry out offline verification.
(iii) an equivalent e-document of any OVD, the bank shall verify the digital signature as
per the provisions of the Information Technology Act, 2000 (21 of 2000) and any rules
issued thereunder and take a live photo as specified under paragraph 24 below.
(iv) any OVD or proof of possession of Aadhaar number under clause (3) above where
offline verification cannot be carried out, the bank shall carry out verification through
digital KYC as specified under paragraph 24 below.
(v) KYC Identifier under clause (4) above, the bank shall retrieve the KYC records
online from the CKYCR in accordance with paragraph 65.
Provided that for a period not beyond such date as the Government may notify for a
class of REs, instead of carrying out digital KYC, the bank pertaining to such class may
obtain a certified copy of the proof of possession of Aadhaar number or the OVD and
a recent photograph where the customer does not submit an equivalent e- document.
Provided further that in case the bank cannot perform an e-KYC authentication for an
individual desirous of receiving any benefit or subsidy under any scheme notified under
section 7 of the Aadhaar (Targeted Delivery of Financial and Other subsidies, Benefits
and Services) Act, 2016 owing to injury, illness or infirmity on account of old age or
otherwise, and similar causes, the bank shall, apart from obtaining the Aadhaar
number, perform identification preferably by carrying out offline verification or
alternatively by obtaining the certified copy of any other OVD or the equivalent e-
document thereof from the customer. An official of the bank shall invariably carry out
CDD done in this manner, and such exception handling shall also be a part of the
concurrent audit as mandated in paragraph 12 and 13. The bank shall ensure to duly
record the cases of exception handling in a centralised exception database. The
database shall contain the details of grounds of granting exception, customer details,
name of the designated official authorising the exception and additional details, if any.
The bank shall subject the database to periodic internal audit / inspection and the bank
shall make database available for supervisory review.
Explanation 1: The bank shall, where its customer submits a proof of possession of
Aadhaar Number containing Aadhaar Number, ensure that such customer redacts or
blacks out his Aadhaar number through appropriate means where the authentication


of Aadhaar number is not required as per proviso (i) above.
Explanation 2: A bank official, business correspondent, or business facilitator can
perform
biometric-based
e-KYC
authentication,
including
Aadhaar
Face
Authentication.
Explanation 3: The bank shall ensure that the use of Aadhaar, proof of possession of
Aadhaar etc., is in accordance with the Aadhaar (Targeted Delivery of Financial and
Other Subsidies Benefits and Services) Act, 2016 and the regulations made
thereunder.
Explanation 4: Aadhaar number is not mandatory for purposes of KYC. However, in
case the customer is desirous of receiving any benefit or subsidy under any scheme
notified under section 7 of the Aadhaar (Targeted Delivery of Financial and Other
subsidies, Benefits and Services) Act, 2016 (18 of 2016), the customer shall provide
the Aadhaar number to the bank. In other cases, customers may provide the Aadhaar
number voluntarily.
24. Digital KYC Process:
(1) The bank shall develop an application for digital KYC process and make it available
at customer touch points for undertaking KYC of its customers and shall undertake the
KYC process only through this authenticated application.
(2) The bank shall control the access to the Application and shall ensure that
unauthorised persons do not use it. Authorised officials shall access the Application
only through a login-id and password or a Live OTP or Time OTP controlled
mechanism that the bank provides.
(3) The customer, for the purpose of KYC, shall visit the location of the authorised
official of the bank or vice-versa. The original OVD shall be in possession of the
customer.
(4) The bank shall ensure that the authorised officer takes a Live photograph of the
customer and embeds the same photograph in the Customer Application Form (CAF).
Further, the bank’s system Application shall put a watermark in readable form,
containing the CAF number, GPS coordinates, authorised official’s name, unique
employee code (which the bank assigns) and date (DD:MM:YYYY) and time stamp
(HH:MM:SS), on the captured live photograph of the customer.


(5) The bank’s Application shall have the feature that it captures only a live photograph
of the customer and does not capture any printed or video graphed photograph. The
background behind the customer while capturing live photograph shall be of white
colour and no other person shall come into the frame while capturing the live
photograph of the customer.
(6) Similarly, the authorised officer shall capture the live photograph of the original OVD
or proof of possession of Aadhaar where offline verification cannot be carried out
(placed horizontally), vertically from above and shall apply a water-marking in readable
form as mentioned above. The authorised officer shall ensure there is no skew or tilt
in the mobile device while capturing the live photograph of the original documents.
(7) The authorised officer shall capture the live photograph of the customer and his
original documents in proper light so that they are clearly readable and identifiable.
(8) Thereafter, the authorised officer shall fill all the entries in the CAF as per the
documents and information furnished by the customer. In those documents where
Quick Response (QR) code is available, such details may be auto-populated by
scanning the QR code instead of manual filing the details. For example, in case of
physical Aadhaar / e-Aadhaar downloaded from UIDAI where QR code is available,
the details like name, gender, date of birth and address may be auto-populated by
scanning the QR available on Aadhaar / e-Aadhaar.
(9) Once the above-mentioned process is completed, a One Time Password (OTP)
message containing the text that ‘Please verify the details filled in form before sharing
OTP’ shall be sent to customer’s own mobile number. Upon successful validation of
the OTP, the bank will treat it as the customer’s signature on CAF. However, if the
customer does not have their own mobile number, the bank may use the mobile
number of their family / relatives / known persons for this purpose and clearly mention
it in the CAF. In any case, the bank shall not use the mobile number of authorised
officer registered with the bank for the customer signature. The bank shall check that
the mobile number used in customer signature is not the mobile number of the
authorised officer.
(10) The authorised officer shall provide a declaration about the capturing of the live
photograph of the customer and original document. For this purpose, the bank shall
verify the authorised officer with One Time Password (OTP) which will be sent to his


mobile number registered with the bank. Upon successful OTP validation, the bank
shall treat it as the authorised officer’s signature on the declaration. The live
photograph of the authorised officer shall also be captured in this authorised officer’s
declaration.
(11)  Subsequent to all these activities, the Application shall give information about the
completion of the process and submission of activation request to activation officer of
the bank, and also generate the transaction-id / reference-id number of the process.
The authorised officer shall intimate the details regarding transaction-id / reference-id
number to the customer for future reference.
(12) The authorised officer of the bank shall check and verify that:
(i) information available in the picture of the document matches with the information
entered by authorised officer in CAF;
(ii) live photograph of the customer matches with the photo available in the document;
and
(iii) the authorised officer has properly filled all of the necessary details in CAF,
including mandatory field.
(13)  On Successful verification, the CAF shall be digitally signed by authorised officer
of the bank who will take a print of CAF, get signatures / thumb-impression of customer
at appropriate place, then scan and upload the same in system. Original hard copy
may be returned to the customer.
(14)  The bank may use the services of Business Correspondent (BC) for this process.
25. Accounts opened using Aadhaar OTP based e-KYC, in non-face-to-face mode, are
subject to the following conditions:
(1) The Customer shall give specific consent for the authentication through OTP.
(2) As a risk-mitigating measure for such accounts, the bank shall ensure that it sends
transaction alerts, OTP, etc., only to the mobile number of the customer registered with
Aadhaar. The bank shall have a Board-approved policy delineating a robust process
of due diligence for dealing with requests for change of mobile number in such
accounts.
(3) The aggregate balance of all the deposit accounts of the customer shall not exceed


Rupees One Lakh. In case the balance exceeds the threshold, the bank shall cease
the account’s operation, until it completes the CDD as mentioned at (6) below.
(4) The aggregate of all credits in a financial year, in all the deposit accounts taken
together, shall not exceed Rupees Two Lakh.
(5) As regards borrowal accounts, the bank shall sanction only term loans. The
aggregate amount of term loans sanctioned shall not exceed ₹60,000 in a year.
(6) The bank shall not allow accounts, both deposit and borrowal, opened using OTP
based e-KYC to operate for more than one year unless it carries out identification as
per paragraph 23 or as per paragraphs 26 and 27 (V-CIP). If the bank uses Aadhaar
details under paragraphs 26 and 27, it shall follow the process in its entirety, including
fresh Aadhaar OTP authentication.
(7) If the bank does not complete the CDD procedure as mentioned above within a
year; (a) in respect of deposit accounts, the bank shall close the same immediately,
and (b) in respect of borrowal accounts, the bank shall allow no further debits.
(8) The bank shall obtain declaration from the customer to the effect that no other
account has been opened nor will be opened using OTP based KYC in non-face-to-
face mode with any other RE. Further, while uploading KYC information to CKYCR,
bank shall clearly indicate that such accounts are opened using OTP based e-KYC
and other REs shall not open accounts based on the KYC information of accounts
opened with OTP based e-KYC procedure in non-face- to-face mode.
(9) The bank shall have strict monitoring procedures including systems to generate
alerts in case of any non-compliance / violation, to ensure compliance with the above-
mentioned conditions.
26.  The bank may undertake V-CIP to carry out:
(1) CDD in case of new customer onboarding for individual customers, proprietor in
case of proprietorship firm, authorised signatories and Beneficial Owners (BOs) in case
of Legal Entity (LE) customers.
Provided that in case of CDD of a proprietorship firm, the bank shall also obtain the
equivalent e-document of the activity proofs with respect to the proprietorship firm, as
mentioned in paragraph 31 and paragraph 32, apart from undertaking CDD of the
proprietor.


(2) Conversion of existing accounts opened in non-face-to-face mode using Aadhaar
OTP based e-KYC authentication as per paragraph 25.
(3) Updation / Periodic updation of KYC for eligible customers.
27. The bank opting to undertake V-CIP, shall adhere to the following minimum
standards:
(1) V-CIP Infrastructure
(i) The bank shall have complied with the RBI guidelines on minimum baseline cyber
security and resilience framework for banks, as updated from time to time as well as
other general guidelines on IT risks. The bank shall house the technology infrastructure
in its own premises and the V-CIP connection and interaction shall necessarily
originate from its own secured network domain. Any technology related outsourcing for
the process shall comply with relevant RBI guidelines. Where the bank uses a cloud
deployment model, it shall ensure that ownership of data in such model rests with the
bank only and all the data including video recording is transferred to the bank’s
exclusively owned / leased server(s) including cloud server, if any, immediately after
the V-CIP process is completed and the cloud service provider or third-party
technology provider assisting the V-CIP shall retain no data.
(ii) The bank shall ensure end-to-end encryption of data between customer device and
the hosting point of the V-CIP application, as per appropriate encryption standards.
The bank shall record the customer consent in an auditable and alteration-proof
manner.
(iii) The V-CIP infrastructure / application shall be capable of preventing connection
from IP addresses outside India or from spoofed IP addresses.
(iv) The video recordings shall contain the live GPS co-ordinates (geo-tagging) of the
customer undertaking the V-CIP and date and time stamp. The quality of the live video
in the V-CIP shall be adequate to allow identification of the customer beyond doubt.
(v) The application shall have components with face liveness / spoof detection as well
as face matching technology with high degree of accuracy, even though the ultimate
responsibility of any customer identification rests with the bank.
Explanation: Making specific facial gestures, like blinking of eyes, smiling, frowning,
etc. is not mandatory for liveness check. The bank shall take due cognizance of special


needs, if any, of the customer during liveness check.
(vi) The bank may use appropriate artificial intelligence (AI) technology to ensure that
the V-CIP is robust.
(vii) Based on experience of detected / attempted / ‘near-miss’ cases of forged identity,
the bank shall regularly update the technology infrastructure including application
software as well as workflows. The bank shall report any detected case of forged
identity through V-CIP as a cyber event under extant regulatory guidelines.
(viii) The bank shall subject the V-CIP infrastructure to necessary tests such as
Vulnerability Assessment, Penetration testing and a Security Audit to ensure its
robustness and end-to-end encryption capabilities. The bank shall mitigate any critical
gap reported under this process before rolling out its implementation. The empanelled
auditors of Indian Computer Emergency Response Team (CERT-In) shall conduct
such tests. Such tests shall also be carried out periodically in conformance to internal
/ regulatory guidelines.
(ix) The bank shall subject the V-CIP application software and relevant APIs /
webservices to appropriate testing of functional, performance, and maintenance
strength before being used in live environment. The bank shall roll out the application
only after closure of any critical gap found during such tests. Such tests shall also be
carried out periodically in conformity with internal / regulatory guidelines.
(2) V-CIP Procedure
(i) Each bank shall formulate a clear workflow and standard operating procedure for V-
CIP and ensure adherence to it. The V-CIP process shall be operated only by officials
of the bank specially trained for this purpose. The official shall be capable to carry out
liveness check and detect any other fraudulent manipulation or suspicious conduct of
the customer and act upon it. The liveness check shall not result in exclusion of person
with special needs.
(ii) Disruption of any sort including pausing of video, reconnecting calls, etc., may not
result in creation of multiple video files. If pause or disruption is not leading to the
creation of multiple files, then the bank may not initiate a fresh session. However, in
case of call drop / disconnection, fresh session shall be initiated.
(iii) The bank shall vary the sequence and / or type of questions, including those


indicating the liveness of the interaction, during video interactions to establish that the
interactions are real-time and not pre-recorded.
(iv) The bank shall reject the account opening process if it observes any prompting at
the customer end.
(v) The bank shall factor in the fact that the V-CIP customer is an existing or new
customer, or if the case relates to one rejected earlier or if the name appears in some
negative list, at an appropriate stage of workflow.
(vi) The authorised official of the bank performing the V-CIP shall record audio and
video as well as capture a photograph of the customer present for identification and
obtain the identification information using any one of the following:
(a) OTP based Aadhaar e-KYC authentication.
(b) Offline Verification of Aadhaar for identification.
(c) KYC records downloaded from CKYCR, in accordance with paragraph 65, using
the KYC identifier provided by the customer.
(d) Equivalent e-document of Officially Valid Documents (OVDs) including documents
issued through DigiLocker.
(vii) The bank shall ensure to redact or blackout the Aadhaar number in terms of
paragraph 23.
(viii) In case of offline verification of Aadhaar using XML file or Aadhaar Secure QR
Code, the bank shall ensure that the XML file or QR code generation date is not older
than three working days from the date of carrying out V-CIP.
(ix) Further, in line with the prescribed period of three working days for usage of
Aadhaar XML file / Aadhaar QR code, the bank shall ensure that it undertakes video
process of the V-CIP within three working days of downloading / obtaining the
identification information through CKYCR / Aadhaar authentication / equivalent e-
document, if in the rare cases, the entire process cannot be completed at one go or
seamlessly. However, the bank shall ensure that no incremental risk is added due to
this.
(x) If the address of the customer is different from that indicated in the OVD, the bank
shall capture suitable records of the current address, as per the existing requirement.


The bank shall ensure that it also confirms the economic and financial profile /
information submitted by the customer from the customer undertaking the V-CIP in a
suitable manner.
(xi) The bank shall capture a clear image of PAN card displayed by the customer during
the process, except in cases where e-PAN is provided by the customer. The bank shall
verify the PAN details from the database of the issuing authority ,including through
DigiLocker.
(xii) The use of printed copy of equivalent e-document, including an e-PAN is not valid
for the V-CIP.
(xiii) The authorised official of the bank shall ensure that photograph of the customer
in the Aadhaar / OVD and PAN / e-PAN matches with the customer undertaking the V-
CIP and the identification details in Aadhaar / OVD and PAN / e-PAN shall match with
the details provided by the customer.
(xiv) The bank shall permit assisted V-CIP when it takes help of Business
Correspondents (BCs) to facilitate the process only at the customer end. The bank
shall maintain the details of the BC assisting the customer, where it utilises the services
of BCs. The bank shall have the ultimate responsibility for customer due diligence.
(xv) The bank shall make all accounts opened through V-CIP operational only after
subjecting them to concurrent audit to ensure the integrity of process and its
acceptability of its outcome.
(xvi) The bank shall appropriately comply with all matters not specified under the
paragraph but required under other statutes such as the Information Technology (IT)
Act.
(3) V-CIP Records and Data Management
(i) The bank shall store the entire data and recordings of V-CIP in a system / systems
located in India. The bank shall ensure that the video recording is stored in a safe and
secure manner and bears the date and time stamp that affords easy historical data
search. The extant instructions on record management, as stipulated in this direction,
shall also apply to V-CIP.
(ii) The bank shall preserve the activity log along with the credentials of the official
performing the V-CIP.


28. Notwithstanding anything contained in paragraph 23 and as an alternative thereto,
in case an individual who desires to open a bank account, the bank shall open a ‘Small
Account’, which entails the following limitations:
(1) the aggregate of all credits in a financial year does not exceed Rupees One Lakh;
(2) the aggregate of all withdrawals and transfers in a month does not exceed ₹10,000;
and
(3) the balance at any point of time does not exceed ₹50,000.
Provided that the bank shall not consider this limit on balance when making deposits
through Government grants, welfare benefits and payment against procurements.
(4) Further, small accounts are subject to the following conditions:
(i) The bank shall obtain a self-attested photograph from the customer.
(ii) The designated officer of the bank certifies under their signature that the person
opening the account has affixed their signature or thumb impression in their presence.
Provided that when the individual is a prisoner in a jail, they shall affix their signature
or thumbprint in the presence of the officer-in-charge of the jail and the said officer
shall certify the same under his signature. The account shall remain operational only if
the prisoner annually submits the proof of address that the officer in-charge of the jail
issues.
(iii) The bank shall open such accounts only at Core Banking Solution (CBS) linked
branches or in a branch where it is possible to manually monitor and ensure that it
does not credit foreign remittances to the account.
(iv) The bank shall ensure that the stipulated monthly and annual limits on aggregate
of transactions and balance requirements in such accounts are not breached, before
it allows a transaction to take place.
(v) The account shall remain operational initially for a period of 12 months which the
bank can extend for a further period of 12 months, provided the account holder applies
and furnishes evidence of having applied for any of the OVDs during the first 12 months
of the opening of the said account.
(vi) The bank shall review the entire relaxation provisions after 24 months.
(vii) Notwithstanding anything contained in clauses (v) and (vi) above, the small


account shall remain operational between April 1, 2020, and June 30, 2020, and such
other periods as the Central Government may notify.
(viii) The bank shall monitor the account, and when there is suspicion of money
laundering or financing of terrorism activities or other high-risk scenarios, the bank
shall establish the identity of the customer as per paragraph 23 or paragraphs 26 and
27.
(ix) The bank shall not allow foreign remittance to be credited into the account unless
it fully establishes the identity of the customer as per paragraph 23 or paragraphs 26
and 27.
Provided that if the bank renders any account ineligible for being classified as a small
account due to credits / balance in the account exceeding the permissible limits, the
bank may allow withdrawals within the limit prescribed for small accounts where the
limits thereof have not been breached.
29. KYC verification once done by one branch / office of the bank shall be valid for
transfer of the account to any other branch / office of the same bank, provided the bank
has already completed the full KYC verification for the concerned account and the
same is not due for periodic updation.
B. CDD Measures for Sole Proprietary firms
30. For opening an account in the name of a sole proprietary firm, the bank shall carry
out the CDD of the individual (proprietor).
31. In addition to the above, the bank shall also obtain any two of the following
documents or the equivalent e-documents thereof as proof of business / activity in the
name of the proprietary firm:
(1) Registration certificate including Udyam Registration Certificate (URC) issued by
the Government.
(2) Certificate / licence issued by the municipal authorities under Shop and
Establishment Act
(3) Sales and income tax returns
(4) CST / VAT / GST certificate
(5) Certificate / registration document issued by Sales Tax / Service Tax / Professional


Tax authorities
(6) IEC (Importer Exporter Code) issued to the proprietary concern by the office of
DGFT or Licence / certificate of practice issued in the name of the proprietary concern
by any professional body incorporated under a statute
(7) Complete Income Tax Return (not just the acknowledgement) in the name of the
sole proprietor where the firm's income is reflected, duly authenticated / acknowledged
by the Income Tax authorities
(8) Utility bills such as electricity, water, landline telephone bills, etc.
32. In cases where the bank is satisfied that it is not possible to furnish two such
documents, the bank may, at its discretion, accept only one of those documents as
proof of business / activity.
Provided that the bank undertakes contact point verification and collects such other
information and clarifications as would be required to establish the existence of such
firm, and shall confirm and satisfy itself that it has verified the business activity from the
address of the proprietary concern.
C. CDD Measures for Legal Entities
33. For opening an account of a company, the bank shall obtain certified copies of
each of the following documents or the equivalent e-documents thereof:
(1) Certificate of incorporation
(2) Memorandum and Articles of Association
(3) PAN of the company
(4) A resolution from the Board of Directors and power of attorney granted to its
managers, officers or employees to transact on its behalf
(5) Documents, as specified in paragraph 23, relating to beneficial owner, managers,
officers or employees, as the case may be, holding an attorney to transact on the
company’s behalf
(6) The names of the relevant persons holding a senior management position; and
(7) The registered office and the principal place of its business, if it is different.
34. For opening an account of a partnership firm, the bank shall obtain the certified


copies of each of the following documents or the equivalent e-documents thereof:
(1) Registration certificate
(2) Partnership deed
(3) PAN of the partnership firm
(4) Documents, as specified in paragraph 23, relating to beneficial owner, managers,
officers or employees, as the case may be, holding an attorney to transact on its behalf
(5) the names of all the partners and
(6) address of the registered office, and the principal place of its business, if it is
different.
35. For opening an account of a trust, the bank shall obtain the certified copies of each
of the following documents or the equivalent e-documents thereof:
(1) Registration certificate
(2) Trust deed
(3) PAN or Form No.60 of the trust
(4) Documents, as specified in paragraph 23, relating to beneficial owner, managers,
officers or employees, as the case may be, holding an attorney to transact on its behalf
(5) the names of the beneficiaries, trustees, settlor, protector, if any and authors of the
trust
(6) the address of the registered office of the trust; and
(7) list of trustees and documents, as specified in paragraph 23, for those discharging
the role as trustee and authorised to transact on behalf of the trust.
36. For opening an account of an unincorporated association or a body of individuals,
the bank shall obtain the certified copies of each of the following documents or the
equivalent e-documents thereof:
(1) Resolution of the managing body of such association or body of individuals
(2) PAN or Form No. 60 of the unincorporated association or a body of individuals
(3) Power of attorney granted to transact on its behalf
(4) Documents, as specified in paragraph 23, relating to beneficial owner, managers,


officers or employees, as the case may be, holding an attorney to transact on its behalf
and
(5) Such information as may be required by the bank to collectively establish the legal
existence of such an association or body of individuals.
Explanation: Unregistered trusts / partnership firms shall be included under the term
‘unincorporated association’.
Explanation: The term ‘body of individuals’ includes societies.
37. For opening account of a customer who is a juridical person (not specifically
covered in the earlier part) such as societies, universities and local bodies like village
panchayats, etc., or who purports to act on behalf of such juridical person or individual
or trust, the bank shall obtain and verify the certified copies of the following documents
or the equivalent e-documents thereof:
(1) Document showing name of the person authorised to act on behalf of the entity
(2) Documents, as specified in paragraph 23, of the person holding an attorney to
transact on its behalf and
(3) Such documents as may be required by the bank to establish the legal existence
of such an entity / juridical person.
Provided that in case of a trust, the bank shall ensure that trustees disclose their status
at the time of commencement of an account-based relationship or when carrying out
transactions as specified in clauses (2), (5) and (6) of paragraph 21 of these directions.
D. Identification of Beneficial Owner
38. For opening an account of a Legal Person who is not a natural person, the bank
shall identify the beneficial owner(s) and shall undertake all reasonable steps in terms
of sub- rule (3) of Rule 9 of the Rules to verify their identity, keeping in view the
following:
(1) Where the customer or the owner of the controlling interest is:
(i) an entity listed on a stock exchange in India, or
(ii) it is an entity resident in jurisdictions notified by the Central Government and listed
on stock exchanges in such jurisdictions, or


(iii) it is a subsidiary of such listed entities; it is not necessary to identify and verify the
identity of any shareholder or beneficial owner of such entities.
(2) In cases of trust / nominee or fiduciary accounts, the bank determines whether the
customer is acting on behalf of another person as trustee / nominee or any other
intermediary. In such cases, the bank shall obtain satisfactory evidence of the identity
of the intermediaries and of the persons on whose behalf they are acting, as well as
details of the nature of the trust or other arrangements in place.
E.  On-going Due Diligence
39. The bank shall undertake ongoing due diligence of customers to ensure that their
transactions are consistent with their knowledge about the customers, customers’
business and risk profile, the source of funds / wealth.
40. Without prejudice to the generality of factors that call for close monitoring, the bank
shall necessarily monitor the following types of transactions:
(1) Large and complex transactions including RTGS transactions, and those with
unusual patterns, inconsistent with the normal and expected activity of the customer,
which have no apparent economic rationale or legitimate purpose.
(2) Transactions which exceed the thresholds prescribed for specific categories of
accounts.
(3) High account turnover inconsistent with the size of the balance maintained.
(4) Deposit of third-party cheques, drafts, etc. in the existing and newly opened
accounts followed by cash withdrawals for large amounts.
For ongoing due diligence, the bank may consider adopting appropriate innovations
including artificial intelligence and machine learning (AI and ML) technologies to
support effective monitoring.
41. The bank shall align the extent of monitoring with the risk category of the
customer.
(1) The bank shall put in place a system of periodic review of risk categorisation of
accounts, with such periodicity being at least once in every six months, and shall
establish the need for applying enhanced due diligence measures.
(2) The bank shall closely monitor the transactions in accounts of marketing firms,


especially accounts of Multi-level Marketing (MLM) companies.
Explanation: The bank shall subject high-risk accounts to more intensified monitoring.
Explanation: Cases where a large number of cheque books are sought by the company
and / or multiple small deposits (generally in cash) across the country in one bank
account and / or where a large number of cheques are issued bearing similar amounts
/ dates, shall be immediately reported to RBI and other appropriate authorities such as
FIU-IND.
42. Updation / Periodic Updation of KYC
(1) The bank shall adopt a risk-based approach for periodic updation of KYC ensuring
that it keeps the information or data collected under CDD is kept up-to-date and
relevant, particularly where there is high risk. However, the bank shall carry out periodic
updation at least once in every two years for high-risk customers, once in every eight
years for medium risk customers and once in every 10 years for low-risk customers
from the date of opening of the account / last KYC updation. The bank shall document
its policy in this regard as part of the bank’s internal KYC policy duly approved
by the Board of Directors of bank or any committee of the Board to which power has been
delegated.
(2) Notwithstanding the provisions given above, in respect of an individual customer
who is categorised as low-risk, the bank shall allow all transactions and ensure the
updation of KYC within one year of its falling due for KYC or up to June 30, 2026,
whichever is later. The bank shall subject accounts of such customers to regular
monitoring. This shall also apply to low-risk individual customers for whom periodic
updation of KYC has already fallen due.
(3) Individuals:
(i) No change in KYC information: In case of no change in the KYC information, the
bank shall obtain a self-declaration from the customer in this regard through the
customer’s email-id registered with the bank, customer’s mobile number registered
with the bank, ATMs, or digital channels (such as online banking / internet banking,
mobile application of bank) letter, etc.
(ii) Change in address: In case of a change only in the address details of the
customer, the bank shall obtain a self-declaration of the new address from the


customer through customer’s email-id registered with the bank, customer’s mobile
number registered with the bank, ATMs, digital channels (such as online banking /
internet banking, mobile application of bank), letter, etc., and shall verify the declared
address through positive confirmation within two months, by means such as address
verification letter, contact point verification, deliverables, etc.
(iii) Further, the bank at its option, may obtain a copy of OVD or deemed OVD, as
defined in sub-clause (xiv) of clause (1) of paragraph 5, or the equivalent e-documents
thereof, as defined in sub-clause (x) of clause (1) of paragraph 5, for the purpose of
proof of address, declared by the customer at the time of updation / periodic updation.
However, the bank shall clearly specify such requirement, in its internal KYC policy
duly approved by the Board of Directors of the bank or any committee of the Board to
which power has been delegated.
(iv) Use of Business Correspondent (BC) by banks for Updation / Periodic Updation of
KYC: The bank may obtain a self-declaration from the customer in case of no change
in KYC information or change only in the address details through an authorised BC of
the bank. The bank shall enable its BC systems for recording these self-declarations
and supporting documents thereof in electronic form in the bank’s systems.
The bank shall obtain the self-declaration including the supporting documents, if
required, in the electronic mode from the customer through the BC, after successful
biometric based e-KYC authentication. Until the bank makes an option available in the
electronic mode, the customer may submit such declaration in physical form. The BC
shall authenticate the self-declaration and supporting documents submitted in person
by the customer and promptly forward the same to the concerned bank branch. The
BC shall provide the customer an acknowledgment of receipt of such declaration
/submission of documents.
The bank shall update the customer’s KYC records and intimate the customer once
the records get updated in the system, as required under clause (5) of paragraph 42
of the Direction. It is, however, reiterated that the concerned bank retains the ultimate
responsibility for periodic updation of KYC.
(v) Accounts of customers, who were minor at the time of opening account, on their
becoming major: In case of customers for whom the bank opened an account when
they were minors, the bank shall obtain fresh photographs upon their becoming a major


and, at that time, shall ensure that CDD documents as per the current CDD standards
are available. Wherever required, the bank may carry out fresh KYC of such
customers, i.e., customers for whom it opened account when they were minor, upon
their becoming a major.
(vi) The bank may use Aadhaar OTP based e-KYC in non-face-to-face mode for
updation / periodic updation.  To clarify,  conditions  stipulated  in paragraph 25 are not
applicable in case of updation / periodic updation of KYC through Aadhaar OTP based
e-KYC in non-face to face mode.
(vii) Declaration of current address, if the current address is different from the address
in Aadhaar, shall not require positive confirmation in this case. The bank shall ensure
that the mobile number for Aadhaar authentication is same as the one available with
them in the customer’s profile, in order to prevent any fraud.
(4) Customers other than individuals:
(i) No change in KYC information: In case of no change in the KYC information of
the LE customer, the bank shall obtain a self-declaration in this regard from the LE
customer through its email id registered with the bank, ATMs, digital channels (such
as online banking / internet banking, mobile application of bank), letter from an official
authorised by the LE in this regard, board resolution, etc. Further, the bank shall ensure
during this process that Beneficial Ownership (BO) information available with them is
accurate and shall update the same, if required, to keep it as up-to-date as possible.
(ii) Change in KYC information: In case of change in KYC information, the bank shall
undertake the KYC process equivalent to that applicable for onboarding a new LE
customer.
(5) Additional measures: In addition to the above, the bank shall ensure that:
(i) The bank has customer’s KYC document as per the current CDD standards
available with it. This is applicable even if there is no change in customer information
but the documents available with the bank are not as per the current CDD standards.
Further, in case the validity of the CDD documents available with the bank has expired
at the time of periodic updation of KYC, the bank shall undertake the KYC process
equivalent to that applicable for onboarding a new customer.
(ii) The bank verifies the customer’s PAN details, if available, from the database of the


issuing authority at the time of periodic updation of KYC.
(iii) The bank provides an acknowledgment to the customer mentioning the date of
receipt of the relevant document(s), including self-declaration from the customer, for
carrying out updation / periodic updation. Further, the bank shall ensure that it promptly
updates the information / documents obtained from the customers at the time of
updation / periodic updation of KYC in its records / database and provide an intimation,
mentioning the date of updation of KYC details, to the customer.
(iv) In order to ensure customer convenience, the bank may consider making available
the facility of updation / periodic updation of KYC at any branch, in terms of their internal
KYC policy duly approved by the Board of Directors of the bank or any committee of
the Board to which power has been delegated.
(v) The bank shall adopt a risk-based approach with respect to periodic updation of
KYC. The bank shall clearly specify in its internal policy, duly approved by the Board
of Directors of the bank or any committee of the Board to which power has been
delegated, any additional and exceptional measures, it adopts that are not otherwise
mandated under the above instructions, such as requirement of obtaining recent
photograph, requirement of physical presence of the customer, requirement of periodic
updation of KYC only in the branch of the bank where account is maintained, a more
frequent periodicity of KYC updation than the minimum specified periodicity etc.
(6) The bank shall advise the customers that in order to comply with the PML Rules, in
case of any update in the documents submitted by the customer at the time of
establishment of business relationship / account-based relationship and thereafter, as
necessary; customers shall submit to the bank the update of such documents. This
shall be done within 30 days of the update to the documents for the purpose of updating
the records at the bank’s end.
(7) Due Notices for Periodic Updation of KYC: The bank shall intimate its customers,
in advance, to update their KYC. Prior to the due date of periodic updation of KYC, the
bank shall give at least three advance intimations, including at least one intimation by
letter, at appropriate intervals to its customers through available communication
options / channels for complying with the requirement of periodic updation of KYC.
Subsequent to the due date, the bank shall give at least three reminders, including at
least one reminder by letter, at appropriate intervals, to such customers who have still


not complied with the requirements, despite advance intimations. The letter of
intimation / reminder may, inter alia, contain easy-to-understand instructions for
updating KYC, escalation mechanism for seeking help, if required, and the
consequences, if any, of failure to update their KYC in time. Issue of such advance
intimation / reminder shall be duly recorded in the bank’s system against each
customer for audit trail. The bank shall expeditiously implement the same but not later
than January 01, 2026.
43. In case of existing customers, the bank shall obtain the PAN or equivalent e-
document thereof or Form No. 60, by such date which the Central Government may
notify, failing which the bank shall temporarily cease operations in the account until the
customer submits the PAN or equivalent e-documents thereof or Form No. 60.
Provided that before temporarily ceasing operations for an account, the bank shall give
the customer an accessible notice and a reasonable opportunity to be heard. Further,
the bank shall include, in its internal policy, appropriate relaxation(s) for continued
operation of accounts for customers who are unable to provide PAN or equivalent e-
document thereof or Form No. 60 owing to injury, illness or infirmity on account of old
age or otherwise, and such like causes. However, the bank shall subject such accounts
to enhanced monitoring.
Provided further that if a customer having an existing account-based relationship with
a bank gives in writing to the bank that they do not want to submit their PAN or
equivalent e-document thereof or Form No. 60, the bank shall close the account and
all obligations due in relation to the account shall be appropriately settled after
establishing the identity of the customer by obtaining the identification documents as
applicable to the customer.
Explanation: For the purpose of this paragraph, ‘temporary ceasing of operations’ in
relation to an account shall mean the temporary suspension of all transactions or
activities in relation to that account by the bank till such time the customer complies
with the provisions of this paragraph. In case of asset accounts such as loan accounts,
for the purpose of ceasing the operation in the account, only credits shall be allowed.
F. Enhanced and Simplified Due Diligence Procedure
F.1 Enhanced Due Diligence
44. Enhanced Due Diligence (EDD) for non-face-to-face customer onboarding (other


than customer onboarding in terms of paragraph 25): Non-face-to-face onboarding
facilitates the bank to establish a relationship with the customer without meeting the
customer physically or through V-CIP. Such non-face-to-face modes for the purpose
of this paragraph include use of digital channels such as CKYCR, DigiLocker,
equivalent e-document, etc., and non- digital modes such as obtaining copy of OVD
certified by additional certifying authorities as allowed for NRIs and PIOs. The bank
shall undertake the following EDD measures for non-face-to-face customer onboarding
(other than customer onboarding in terms of paragraph 25):
(1) If the bank has introduced the process of V-CIP, it shall provide the same as the
first option to the customer for remote onboarding. It is reiterated that the bank shall
treat processes complying with prescribed standards and procedures for V-CIP on par
with face-to-face CIP for the purpose of these Directions.
(2) In order to prevent frauds, alternate mobile numbers shall not be linked post CDD
with such accounts for transaction OTP, transaction updates, etc. The bank shall
permit transactions only from the mobile number used for account opening. The bank
shall have a Board-approved policy delineating a robust process of due diligence for
dealing with requests for change of registered mobile number.
(3) Apart from obtaining the current address proof, the bank shall verify the current
address through positive confirmation before allowing operations in the account. The
bank may carry out the positive confirmation by means of such as address verification
letter, contact point verification, deliverables, etc.
(4) The bank shall obtain PAN from the customer and the PAN shall be verified from
the verification facility of the issuing authority.
(5) First transaction in such accounts shall be a credit from existing KYC-complied
bank account of the customer.
(6) The bank shall categorise such customers as high-risk customers and shall subject
accounts opened in non-face-to-face mode to enhanced monitoring until the identity of
the customer is verified in face-to-face manner or through V-CIP.
45. Accounts of Politically Exposed Persons (PEPs)
(1) The bank shall have the option of establishing a relationship with PEPs (whether
as customer or beneficial owner) provided that, apart from performing normal customer


due diligence:
(i) the bank has in place appropriate risk management systems to determine whether
the customer or the beneficial owner is a PEP;
(ii) The bank shall take reasonable measures for establishing the source of funds /
wealth;
(iii) the bank shall obtain approval to open an account for a PEP from the senior
management;
(iv) the bank subjects all such accounts to enhanced monitoring on an on-going basis;
(v) in the event of an existing customer or the beneficial owner of an existing account
subsequently becoming a PEP, the bank obtains the senior management’s approval
to continue the business relationship;
(2) These instructions shall also apply to family members or close associates of PEPs.
Explanation: For the purpose of this paragraph, ‘Politically Exposed Persons’ (PEPs)
are individuals who are or have been entrusted with prominent public functions by
a foreign country, including the Heads of States / Governments, senior
politicians, senior government or judicial or military officers, senior executives of
state-owned corporations and important political party officials.
46. Client accounts opened by professional intermediaries: The bank shall ensure
while opening client accounts through professional intermediaries, that:
(1) The bank shall identify clients when a professional intermediary opens a client
account on behalf of a single client.
(2) The bank shall have option to hold 'pooled' accounts managed by professional
intermediaries on behalf of entities like mutual funds, pension funds or other types of
funds.
(3) The bank shall not open accounts of such professional intermediaries who are
bound by any client confidentiality which prohibits disclosure of the client details to the
bank.
(4) The bank shall identify all the beneficial owners where intermediaries do not co-
mingle funds at the level of the bank, and there are 'sub- accounts', each of them
attributable to a beneficial owner, or where such funds are co-mingled at the level of


the bank, the bank shall look for the beneficial owners.
(5) The bank shall, at their discretion, rely on the 'customer due diligence' (CDD) done
by an intermediary, provided that the intermediary is a regulated and supervised entity
and has adequate systems in place to comply with the KYC requirements of the
customers.
(6) The ultimate responsibility for knowing the customer lies with the bank.
F.2 Simplified Due Diligence
47. Simplified norms for Self Help Groups (SHGs):
(1) The bank shall not require CDD of all the members of an SHG while opening the
savings bank account of the SHG.
(2) The CDD of all the office bearers shall suffice.
(3) The bank may undertake CDD of all the members of an SHG at the time of credit
linking of SHGs.
48.  Procedure to be followed by the bank while opening accounts of foreign
students
(1) The bank shall, at its option, open a Non-Resident Ordinary (NRO) bank account of
a foreign student on the basis of his / her passport (with visa and immigration
endorsement) bearing the proof of identity and address in the home country together
with a photograph and a letter offering admission from the educational institution in
India.
Provided that the bank shall obtain a declaration about the local address within a period
of 30 days of opening the account and shall verify the said local address.
Provided further that pending the verification of address, the account shall be operated
with the condition that allows foreign remittances not exceeding USD 1,000 or
equivalent into the account and a cap of ₹50,000 on aggregate withdrawal of the same,
during the 30-day period.
(2) The account shall be treated as a normal NRO account, and shall be operated in
terms of RBI’s instructions on Non-Resident Ordinary Rupee (NRO) Account, and the
provisions of FEMA 1999.
(3) Students with Pakistani nationality shall require prior approval of the RBI for


opening the account.
49.  Simplified KYC norms for Foreign Portfolio Investors (FPIs):
(1) Accounts of FPIs which are eligible / registered as per SEBI guidelines, for the
purpose of investment under Portfolio Investment Scheme (PIS), shall be opened by
accepting KYC documents as detailed in (2) below, subject to Income Tax (FATCA /
CRS) Rules.
Provided that the bank shall obtain an undertaking from FPIs or the Global Custodian
acting on behalf of the FPI that as and when required, the exempted documents as
detailed in (2) below will be submitted.
(2) KYC documents for eligible FPIs under PIS:

FPI Type
Document Type
Category I
Category II
Category III
Entity Level
Constitutive
Documents
(Memorandum
and Articles of
Association,
Certificate of
Incorporation
etc.)
Mandatory
Mandatory
Mandatory
Proof of
Address
Mandatory
(Power of
Attorney {PoA}
mentioning the
address is
acceptable as
address proof)
Mandatory
(Power of
Attorney
mentioning the
address is
acceptable as
address proof)
Mandatory
other than
Power of
Attorney
PAN
Mandatory
Mandatory
Mandatory
Financial Data Exempted *
Exempted *
Mandatory
SEBI
Registration
Certificate
Mandatory
Mandatory
Mandatory
Board
Resolution
@@
Exempted *
Mandatory
Mandatory


Senior
Management
(Whole Time
Directors/
Partners/
Trustees/
etc.)
List
Mandatory
Mandatory
Mandatory
Proof of
Identity
Exempted *
Exempted *
Entity
declares* on
letter head full
name,
nationality,
date of birth or
submits photo
identity proof
Proof of
Address
Exempted *
Exempted *
Declaration on
Letter Head *

Authorised
Signatories
Photographs
Exempted
Exempted
Exempted *
List and
Signatures
Mandatory – list
of Global
Custodian
signatories can
be given in case
of PoA to Global
Custodian
Mandatory - list
of Global
Custodian
signatories can
be given in case
of PoA to Global
Custodian
Mandatory
Proof of
Identity
Exempted *
Exempted *
Mandatory
Proof of
Address
Exempted *
Exempted *
Declaration on
Letter Head *
Photographs
Exempted
Exempted
Exempted *
Ultimate
Beneficial
Owner (UBO)
List
Exempted *
Mandatory
Mandatory
Proof of
Identity
Exempted *
Exempted *
Mandatory
Proof of
Address
Exempted *
Exempted *
Declaration on
Letter Head *
Photographs
Exempted
Exempted
Exempted *
* Not required while opening the bank account. However, FPIs concerned may submit
an undertaking that upon demand by Regulators/Law Enforcement Agencies the
relative document/s would be submitted to the bank.


 @@ FPIs from certain jurisdictions where the practice of passing Board Resolution
for the purpose of opening bank accounts etc. is not in vogue, may submit ‘Power of
Attorney granted to Global Custodian/Local Custodian in lieu of Board Resolution’
Category
Eligible Foreign Investors
I.
Government and Government related foreign investors such
as Foreign Central Banks, Governmental Agencies,
Sovereign  Wealth  Funds,  International/  Multilateral
Organisations/ Agencies.
II.
Appropriately regulated broad based funds such as Mutual
Funds,  Investment  Trusts,  Insurance / Reinsurance
Companies, Other Broad Based Funds etc.
Appropriately regulated entities such as Banks, Asset
Management Companies, Investment Managers/ Advisors,
Portfolio Managers etc.
Broad
based
funds
whose
investment
manager
is
appropriately regulated.
University Funds and Pension Funds.
University related Endowments already registered with SEBI
as FII/Sub Account.
III.
All other eligible foreign investors investing in India under PIS
route not eligible under Category I and II such as
Endowments,  Charitable  Societies/Trust,  Foundations,
Corporate Bodies, Trusts, Individuals, Family Offices, etc.


Chapter VII – Record Management
50. The bank shall take the following steps regarding maintenance, preservation
and reporting of customer information, with reference to provisions of PML Act and
Rules. The bank shall,
(1) maintain all necessary records of transactions between the bank and the customer,
both domestic and international, for at least five years from the date of transaction;
(2) preserve the records pertaining to the identification of the customers and their
addresses, obtained while opening the account and during the course of business
relationship, for at least five years after the business relationship has ended;
(3) swiftly make available, the identification records and transaction data to the
competent authorities upon request;
(4) introduce a system of maintaining proper records of transactions prescribed under
Rule 3 of Prevention of Money Laundering (Maintenance of Records) Rules, 2005
(PML Rules, 2005);
(5) maintain all necessary information in respect of transactions prescribed under PML
Rule 3 to permit the reconstruction of an individual transaction, including the
following:
(i) the nature of the transactions;
(ii) the amount of the transaction and the currency in which it was denominated;
(iii) the date on which the transaction was conducted; and
(iv) the parties to the transaction.
(6) evolve a system for proper maintenance and preservation of account information
in a manner that allows the bank to retrieve data easily and quickly whenever required
or when competent authorities request it;
(7) maintain records of the identity and address of its customers, and records in respect
of transactions referred to in Rule 3 in hard or soft format.
Explanation – For the purpose of this paragraph, the expressions ‘records pertaining
to the identification’, ‘identification records’, etc., shall include updatedrecords of the
identification data, account files, business correspondence and results of any analysis


undertaken.
51. The bank shall ensure that in case of customers who are non-profit organisations,
the bank registers details of such customers on the DARPAN Portal of NITI Aayog. If
they are not registered, the bank shall register the details on the DARPAN Portal. The
bank shall also maintain such registration records for a period of five years after the
business relationship between the customer and the bank has ended or the account
has been closed, whichever is later.


Chapter VIII – Reporting Requirements to Financial Intelligence Unit – India
52. The bank shall furnish to the Director, Financial Intelligence Unit-India (FIU-
IND), the information referred to in Rule 3 of the PML (Maintenance of Records)
Rules, 2005 in accordance with Rule 7 thereof.
Explanation: In terms of Third Amendment Rules notified September 22, 2015
regarding amendment to sub rule 3 and 4 of rule 7, Director, FIU-IND shall have powers
to issue guidelines to the REs for detecting transactions referred to in various clauses
of sub-rule (1) of rule 3, to direct them about the form of furnishing information and to
specify the procedure and the manner of furnishing information.
53. The bank shall take note of the reporting formats and comprehensive reporting
format guide, prescribed / released by FIU-IND and Report Generation Utility and
Report Validation Utility developed to assist reporting entities in the preparation of
prescribed reports. The bank which is yet to install / adopt suitable technological
tools for extracting CTR / STR from its live transaction data shall make use of the
editable electronic utilities to file electronic Cash Transaction Reports (CTR) /
Suspicious Transaction Reports (STR) which FIU- IND has placed on its website.
The Principal Officer of the bank, shall have suitable arrangement to cull out the
transaction details from branches which are yet to be computerised and to feed
the data into an electronic file with the help of the editable electronic utilities of CTR
/ STR as have been made available by FIU-IND on its website http://fiuindia.gov.in.
54. When furnishing information to the Director, FIU-IND, a delay of each day in
not reporting a transaction or delay of each day in rectifying a mis-represented
transaction beyond the time limit as specified in the Rule shall constitute as a
separate violation. The bank shall not put any restriction on operations in the
accounts merely on the basis of the STR filed.
The bank, its directors, officers, and all employees shall ensure that the fact of
maintenance of records referred to in rule 3 of the PML (Maintenance of Records)
Rules, 2005, and furnishing of the information to the Director is confidential.
However, such confidentiality requirement shall not inhibit sharing of information
under paragraph 8 of these Directions of any analysis of transactions and activities
which appear unusual, if the bank has done any such analysis.
55. To identify and report suspicious transactions effectively, the bank shall implement